Bitcoin officially launched in 2009, and now, 14 years later, over 15,000 digital coins make up the cryptocurrency market, according to crypto.com.
But it hasn’t exactly been a smooth ride for crypto investors.
Although the industry was once valued at around $3 trillion, the crypto market lost a little over $2 trillion in value in 2022 in what has been dubbed “crypto winter.” Last year, a string of high-profile crypto companies filed for bankruptcy, and FTX, a crypto exchange platform that was once valued at $32 billion, collapsed.
So far in 2023, bitcoin hasn’t quite bounced back to its previous highs. As of April 25, its price hovered around $28,000, far below the $68,000 it reached at its peak in November 2021.
As with any asset, it’s important to understand it before investing your money. Think you know your stuff? Test your knowledge with CNBC Make It’s Crypto 101 quiz.
No matter how well you scored on the quiz, remember that unlike stocks or bonds, virtual currencies typically don’t derive their value from an underlying asset. Cryptocurrency can fluctuate or decrease in value erratically, which is why it’s considered to be a highly volatile asset.
Since digital currencies are a relatively new technology and considered to be highly speculative assets, financial experts tend to recommend against spending more money on virtual currency than you’re willing to lose.
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